India's largest commercial bank, State Bank of India (SBI) increased its fixed deposit rate by 100 basis points to 10.50% for 1,000 days maturity.
This 1000-days deposit scheme is a new launch of SBI and will come into effect from October 1. Senior citizens would be given a higher 11% interest under the new deposit scheme.
Earlier, the bank had just one slab for the period between two years to three years and was paying 9.5% for the same. Now the bank has created three slabs within two years to three years category. For the period between two years to 1,000 days and over 1,000 days and less than three years, the bank is paying an interest rate of 9.5% and 9.75% respectively. However, for the 1,000 days deposit category the interest rate will be 10.5% and for rest of the six categories, the bank has not made any changes in its rates.
For the same maturity senior citizens would get 0.5 percent additional interest.
Besides, an additional 25 basis points over the card rates will be paid on a single term deposit of Rs 15 lakh and above (but less than Rs 1crore) for a period of 181 days to less than 2 years. Where as, an additional 10 basis points over the card rates will be paid on a single term deposit of Rs 15 lakh and above (but less than 1crore) for other periods of less than 181 days and the periods of 2 years and above.
In the current liquidity crunch, this move by the bank seems to mobilize larger funds for medium term lending. As the target for medium-term inflation of Reserve Bank of India (RBI) is above 5%, the bank is now offering to pay higher rates for similar category of deposits.
Being the largest lender, SBI has a vast domestic network of over 9000 branches (approximately 14% of all bank branches) and commands one-fifth of deposits and loans of all scheduled commercial banks in India. The bank offers services like merchant banking, fund management, factoring services, and primary dealership in government securities, credit cards and insurance. Today, SBI has spread its arms around the world and has a network of branches spanning all time zones. Bank's International Banking Group delivers the full range of cross-border finance solutions through its four wings - the Domestic division, the Foreign Offices division, the Foreign Department and the International Services division.